By Analyst Believes Now is the Right Time to Buy Utz Brands Stock
Recently, RBC Capital Markets analyst Nik Modi initiated coverage of Utz stock with an Outperform rating and set a $17 price target. This implies a significant 25% increase compared to the stock’s Monday closing price. Although Utz Brands has experienced a 13% decline in its shares this year, Modi suggests it is an opportune moment to invest in this snack maker.
Weight-Loss Drugs Pose Concerns for the Snack Food Industry
One major concern for Wall Street revolves around the increasing popularity of weight-loss drugs such as Mounjaro, Ozempic, and Wegovy and their potential impact on the snack food market. Notably, Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro are diabetes medications also used for weight management. Additionally, Novo’s Wegovy has gained approval for weight loss purposes.
Addressing Concerns and Embracing Potential
In response to these market concerns, Modi expresses a different viewpoint. While some investors worry about the implications of these drugs on Utz Brands’ performance, Modi remains optimistic. He emphasizes that the high cost of these weight-loss drugs limits their accessibility for the majority of Americans seeking effective weight loss solutions.
In conclusion, despite the dip in Utz Brands’ stock price, RBC Capital Markets analyst Nik Modi believes it presents an excellent investment opportunity. With a positive outlook and confidence in the snack maker’s resilience, Modi’s optimistic initiation of coverage suggests that Utz Brands has the potential for significant future growth.
The Growing Appeal of Salty Snacks
According to an analyst, consumption of indulgent salty snacks, often considered as “junk food,” tends to be higher among lower-income individuals. Surprisingly, these individuals are not the primary users of these snacks.
In the midst of rising grocery prices and inflation, consumers are feeling the pinch. As a result, some shoppers are opting for store brands or even cutting back on snack purchases altogether.
Despite these challenges, there is optimism for investors who are willing to be patient. Utz, a pure-play salty snack company, presents a compelling opportunity. This segment of the consumer-staples industry is highly attractive due to its rapid growth and limited exposure to private label products. Additionally, long-term drivers such as the increasing number of smaller households and snacking becoming more prevalent in various occasions are expected to contribute to Utz’s success.
As of Tuesday, Utz stock is showing promising growth, with a 1.7% rise to $13.80.
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